For many years, the Internal Revenue Code has provided special
deductions or exclusions from foreign earned income of U.S. citizens and
residents working outside the U.S. Effective with taxable years beginning
after December 31, 1983, however, U.S. citizens or residents engaged in a
trade or business outside the U.S. must compute net earnings from
self-employment. This is true regardless of any foreign earned income
exclusions for which they might be eligible for income tax purposes.